Solid solution formation in the lead-free binary system (1 - x) K0.5Bi0.5TiO3 - xBi(Mg0.5Ti0.5)O-3 has been studied for compositions x <= 0.12. X-ray powder diffraction shows single-phase perovskite for x < 0.1, and a mixed phase region between tetragonal and pseudocubic phases for compositions 0.04 <= x <= 0.06. Large electromechanical strains of similar to 0.3% at fields of 50 kV/cm are recorded in the mixed phase region, with d(33)* (S-max/E-max) values of similar to 600 pm/V. The materials sustain polarization at low electric fields with remnant polarization similar to 18 mu C/cm(2) and coercive field similar to 20 kV/cm for x = 0.06. Relative permittivity-temperature plots display relaxor characteristics, with peak temperature similar to 340 degrees C.